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“Nobody said Open Source makes you rich” and the economics of Open Source

Inside the historic pyramid building in Central Tirana (more recently museum to the nation’s life-long dictator), I concluded my speech on economic challenges to Open Source companies, and raised my eyes from the notes on my tablet to see a sea of hands.

I felt both nervous and exhilarated at the idea that those before me were about to challenge the assumptions underlying the mostly pessimistic conclusions I had drawn about the immediate future of Open Source businesses. Belonging to other conference speakers, those hands prodded at something else entirely however.

“Nobody ever said Open Source would make you rich”, one hand-waver said. “You should create Open Source because it’s the right thing to do, not for the money” said another. Initially I was speechless. As I stood there, under aggressive lighting rigged for TV confounded by this reflected message which I had never considered.

I realised that I had overlooked something fundamental in my presentation, something that was now difficult to concisely convey. So I shall elaborate here as briefly as possible.

Assumption 1

  1. Start-up businesses are a valid means of developing Open Source software

More tenuous than I first realised, but bear with me.

Reasoning 1

  1. A fair day’s work deserves a fair day’s pay
  2. People who labour for the common good are no less deserving than those who labour for themselves
  3. Great achievements require many hard days work
  4. ∴ Achieving great things fairly requires a considerable amount of pay

While it’s true that many Open Source applications are the by-product of other activities, including proprietary applications, that’s not a model I want to explore here.

To draw the same conclusion with alternative reasoning:

Reasoning 2

  1. Software startup economics demand both ‘hyper-growth’ and the investment required to fuel it
  2. Being runner up in a market subject to strong network effects is tantamount to failure
  3. ∴ Major growth targets and major investment are mutually dependent requirements for software startups

In other words, significant investment, revenues, and growth, are all necessary for a successful Open Source startup.

Dirty money?

“Wealth” and “significant investment and revenues” are for many people interchangeable labels. But clearly organisational wealth, and personal wealth are entirely different things. Despite the distrust of Corporate America by generations of Open Source advocates, faith that well-funded firms may conceivably  work for their benefit is reasonable and necessary. One can “be big to do good”. I believe it’s our best hope.

As somebody who has been advocating Open Source for half my life I assume that others like me see wealth, and particularly organisational wealth, as a means to increase Open Source adoption. The sharp lesson learned in Tirana was that wealth is an emotional issue, even in the abstract; even when it’s harnessed for things people love, and whenever I speak about it, the first crucial step is reframing its power as an engine for freedom.

Sam Tuke presenting 'The Economics of Open Source at OSCAl 2018 conference

Sam Tuke and Suela Palushi at OSCAl 2018 conference

Sam Tuke presenting 'The Economics of Open Source at OSCAl 2018 conference

Sam Tuke presenting 'The Economics of Open Source at OSCAl 2018 conference

Slides from my talk are embedded below.

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So, what do you think ?